Odoh Chukwuka

Disruptive Innovation in Telecommunication Industry

A case study of soft-SIM

Master’s Thesis

Spring 2017

School of Business and Culture

Master’s Degree in International Business Management

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SEINÄJOKI UNIVERSITY OF APPLIED SCIENCE

Thesis Abstract

Faculty: Business Administration

Degree Programme: Master´s in International Business Management

Specialisation: International Business management

Author: Odoh Chukwuka Ignatius

Title of Thesis: Disruptive Innovation in the Telecommunication Industry

A case study of soft-SIM

Supervisor: Dr. Sivula Ari

Year: 2017 Number of pages: 59 Number of Appendices 0

This study is on a conceivable disruptive innovation in the telecommunication industry, with specific interest in the adoption of soft-SIM among telecommuni-cation firms. The objective was to the ascertain possibility of acceptance of soft-SIM among mobile operators. Over the years, there have been series of SIM card transformations. In order words, SIM has reduced significantly in size than the standard size. Soft-SIM is anticipated to be the next generation of SIM. Therefore, the likelihood of soft-SIM acceptance is the focus.

The research was made using case study design. Data was obtained via related literature and interviews. Interviewees were gotten from Nigeria and Finland and in-depth information was granted by the informants. Basically, the data was primary data which are the interviews and secondary data from literature which include printed books from academic library and non-printed materials such e-journals and blog.

The findings shows that though soft-SIM appears to be a landmark innovation in the telecommunication sector, however, mobile operators repudiate the idea of soft-SIM due to some expected threats such as: Fear of losing cus-tomer´s loyalty and Churn, a situation of frequent migration from operator to another.

Keywords: Innovation, Disruptive innovation, Telecommunication, Soft-SIM.

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TABLE OF CONTENTS

Abstract……………………………………………………..……………………….2

Table of contents…..…………………….………………………….………………3

Terms and Abbreviation…………………………………………………………….4

Tables, Figures and Pictures………………………………………………….…...5

1 INTRODUCTION....................................................................................…...6

1.1 Aim of the study ....................................................................................7

1.1.1 Research Problem ………………….……………………………......7

1.2 Scope of the study..…………………………………………………….…...7

1.2.1 Research methodology…..............................................................8

1.2.2 Thesis Structure....…………………………………………………....8

2 THEORETICAL BACKGROUND ………………………………………………9

2.1 Adopter categories.........................................................................…...11

2.1.1 Innovation Diffusion Process......………….………………………….13

2.2 Types of innovation………….…………………………………………..….15

2.2.1 SIM evolution over the years …..……………………………………..18

2.2.2 SIM deployments………………………………………………………20

2.3 Soft-SIM: a disruption of SIM card …..……………..……………………24

2.3.1 How soft-SIM works? ………………………………………………….26

2.3.2 Soft-SIM Access and Connectivity…………………………………...27

2.4 Merits of soft-SIM…..………………………………………………………29

2.4.1 Challenges of Soft-SIM……………………………………………….30

2.4.2 Soft-SIM new value chain system……………………………………32

2.5 Soft-SIM security ……………………………………………………….…...34

3 RESEARCH DESIGN AND LAYOUT…………………………………………35

3.1 Structure………….………………………………………………………...40

3.1.1 Methodology……………………………………….……………….…42

3.2 Data gathering………………………….…………………………………..46

3.2.1 Sampling…………………………………………………………………47

4 RESULTS……………………………………….………………………………..48

4.1 PESTEL analysis…………………………………………………………..52

5 CONCLUSION…………………………………………………………………...56

REFERENCES………..……………………………………………………………58

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Terms and Abbreviations

O/I Input/output

SSC SIM standard component

SAC SIM active component

UD Universal Discovery

SE Secure Element

SIM Subscriber Identity Module

IOT Internet of Things

MNO Mobile Network Operator

UICC Universal Integrated Circuit Card

TLS Transport Layer Security

GSMA Global System Mobile Association

M2M Machine to Machine

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Tables, Figures and Pictures Table. 1 19th century economic development fuelled by Technological innovation (Trott 2005)………………………………………………………….....10

Table. 2 SIM sizes (Ken`s Tech)………………………………………………….19

Table. 3. Variance between Quantitative and qualitative methods (NIHR RDS 2009)………………………………………………………………………………...43

Table 4. Soft-SIM SWOT analysis………………………………………………..50

Figure. 1 Adopter categorization (Rogers 2006)………………………………..13

Figure. 2 Innovation diffusion process (Rogers 2006)………………………...14

Figure.3 Gartner´s cycle model on innovation adoption (Gartner 2014)……..15

Figure.4 Four innovation Zones (Moore 2005)………………………………….16

Figure.5 SIM authentication architecture (Penz 2004)………………………..23

Figure. 6 Disruptive innovation curve (Gans 2016).………….........................24

Figure. 7 Play store for SIM download (web page 2016)...…………………..25

Figure. 8 Declined of sales of subsidized devices by 2013-2020 (Meukel

2016)………………………………………………………………………………...33

Figure. 9.. Basic types of designs for case studies(Yin 2009)……………….38

Figure.10 Thesis structure (SeAMK)…………………………………………….41

Figure. 11 Influence on Business research (Bryman & Bell 2007)…………...42

Figure.12 Qualitative research process (Bryman 2007)……………………….45

Figure .13 Soft-SIM SWOT analysis……………………………………………..49

Figure .14 Qualitative analysis as a single sequential process (Dey 2005)…50

Figure 15 Technological innovation framework (Dasgupta 2011)..…………..51

Figure 16. PESTEL analysis (Team FME 2013)………………………………..53

Figure. 17 Making inferences (Yin 2009)……………………………………….54

Figure. 18 New technological success (Gans…………………………………..57

Picture.1 Different sizes of SIM cards (ubergizmo 2017.)………………….…19

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1 INTRODUCTION

From the time of introduction of SIM card in the early 90s, SIM card had

transformed significantly into different generations and sizes (Battu 2016,

255). Originally, it was of the size of a credit card, then in 1996, Mini SIM card

was introduced and was significantly smaller than the standard SIM card. In

2003, there was Micro SIM, another generation of SIM card which became

relatively smaller than the Mini SIM card. Subsequently, in 2012 Nano SIM

card emerged, this time, apparently smaller than the preceding generations of

SIM. Nano SIM card is designed for early 2016 smartphone such as Honor 7

lite. Also in existence is the embedded SIM created by the GSM Association

(Battu op.cit.256), with the idea to promote machine to machine communica-

tion.

The choice of this studies is inspired by the quest for understanding the evolu-

tion of SIM card since 90s till date and examination of the future possibilities

and outlook of SIM. The studies intend to find out how the mobile operators

can adopt the soft-SIM as a replacement for the SIM card. Also in examina-

tion is the probability of adoption of soft-SIM by the mobile operators.

In recent time, the mobile operators have been contemplative on the adoption

of soft-SIM in the telecommunication industry (Ahokanga`s interview, 2017),

as a positive destruction of the physical SIM card .In 2014, Apple made an at-

tempt towards developing SIM nearer to soft-SIM in UK (Meukel et al, 2016).

This SIM enabled subscribers to choose their preferred mobile operator ser-

vice directly from their smart gadget. However on the contrary, Banks (2014)

opposes that Apple SIM is far from soft-SIM as there is presence of a physical

SIM.

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1.1 Aim of the study

The study attempts to examine the possible use of soft-SIM among the mobile

operators. The major objectives of this research are to find out the probability

and possibility of disruption of the current generation of SIM, This appears to

be significant considering the past evolution of SIM and the future outlook of

disruption of SIM.

1.1.1 Research Problem

SIM has been developed severally over the years. The concern and interest

of this research is to ascertain the chances of emergence of a new generation

of SIM, in form of software. There have been significant changes in the evolu-

tion of SIM over the years. At first, in year 1991, the SIM was of the size of a

credit card, then in 1996, it metamorphosed to mini size, later it was in form of

micro size, as from 2012 it became in form of Nano SIM size up till date.

The studies wants to inquire possibility to adopt soft-SIM by the telecommuni-

cation industries

1.2 Scope of the study

The study covered a narrow inquiry of the chances of use of soft-SIM among

the mobile operators. At the end, the reader would have a clue as to the fate

of soft-SIM in the telecommunication. Main sources of data is both primary

and secondary data. The research included some related literature on innova-

tion, articles on SIM development, few interviews drew from experts in tele-

communication and top employees in telecommunication firms in Finland and

Nigeria respectively. This research cannot be said to have covered everything

about disruptive innovation and soft-SIM, rather the researcher feels that it will

assist as a stepping stone for further theory development on disruptive inno-

vation, with particular reference on soft-SIM in the telecommunication indus-

try.

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1.2.1 Research Methodology

The methodological style deployed to elucidate the research problems were

discussed and given justification. Qualitative research method is used in the

research. Classic single case study design (Yin, 2009.170) is adopted to but-

tress the points, the discussion was case study design, using interview data

gathering method.

1.2.2 Structure of the thesis

Chapter one summarizes the general background of the thesis, pointing out

the aim of the study, the research problem, brief analysis of the thesis scope

and the research methodology.

Chapter two compared different views about innovation, related literature on

disruptive innovation and innovation in general. The emphasis is on soft-SIM

chances, benefits and demerits. Different types of innovation was discussed

as well as how soft-SIM works. Chapter three narrates the research design

employed, as well the structure of the thesis, starting from the tittle page to

discussion. Chapter four narrates the research method employed. Qualitative

research was discussed and compared with quantitative research. Sampling

method is also discussed and analyzed. The data gathering method (Inter-

view) is discussed and the primary data outcome determined too. Chapter five

discusses the findings, analytical generalization is used to draw conclusion.

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2 THEORETICAL BACKGROUND

According to Latzer (2009, 599), different scholars depending on their fields,

have described the concept of innovation from several perspective. Trott

(2005, 7) identifies innovation to be the engine of growth in every business

endeavor. Precisely, Latzer (op.cit.608), views disruptive technological im-

provement as an innovative destruction that modify and overhauls the entire

structure of a technology.

Correspondingly, Hang et al (2011, 4) points out that the concept of innova-

tion is a continuous process and is essential in the sustainability of business.

Trott (op.cit.5) emphasizes that businesses must be able to adapt and evolve

if they wish to survive. Also, Linkner (2009, 166-167) suggests that Busi-

nesses must acknowledge that the customer´s taste and segment are always

changing, even if the business is foremost in their field, it must strive to inno-

vate. This implies that innovativeness is important at every stage of business

life cycle. Also, concept of innovation in business has existed over the years,

since the nineteen- Century. Table 1.0 below describes the economic devel-

opment driven by technological innovations as at early nineteenth –century.

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Table 1. 19th century economic development powered by Technological inno-

vation (Trott 2005).

Innovation Innovators

Date

Steam engine James Watt 1770-80

Ron boat Isambard Kingdom Brunel 1820-45

Locomotive George Stephenson 1829

Electromagnetic induction dynamo Michael Faraday 1830-40

Electric light bulb Thomas Edison and Joseph Swan 1879-90

Jia et al in the work´´ Discrete Dynamics in Nature & Society`` (2016), per-

ceive Innovation as an effective way to get profits adding that concepts should

have appropriate model of innovation in order to drive an innovation. How-

ever, Nambisan et al, in the article ´´Digital Innovation`` published in MIS

Quarterly vol.41 No.1.2017, view innovation as the use of digital technology

during the process of innovating. In addition, Rogers (2006,11) had earlier

given an encompassing description of innovation, describing an innovation as

knowledge, practice, or object that is perceived as new by an individual or

other unit of adoption in a social system.

Innovation naturally passes down from the originating source to the different

strata of the social system. The rate at which innovation disseminates in the

social system differ from one innovation to another, this is because there are

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key factors that determine the facilitation of the dissemination of the innova-

tion. In addition, the rate of accepting or rejecting an innovation is dependent

on the diffusion effect. Diffusion effect means the increasing degree of influ-

ence upon an individual or groups of individuals to accept or repudiate an in-

novation. Usually, it is due to the interaction of peer networks about an inno-

vation in a social system.

Rogers (1983, 234-235) argued that a situation that only 5 percent of the indi-

viduals in a social system are aware of a new idea, the degree of influence

upon an individual to adopt or reject the innovation is quite different from

when 95 percent have adopted. According to Rogers (1983.10), the main ele-

ments in the transmission of new ideas include the perceived innovation, the

channels of communicating the idea to the strata of the social system, the du-

ration it takes and the members of social system.

This process of disseminating information among the strata of the social sys-

tem is known as diffusion. It is imperative to note that diffusion occurs within a

social system, because the social structure of the system affects the innova-

tion's diffusion in several ways. The social system constitutes of adopter cate-

gories, a boundary within which an innovation diffuses. Moore (2005, 14),

proposes that the bases of technology adoption life cycle is anchored on di-

verse responses which organizations and people make in a situation of dis-

ruptive innovation, within their social system.

2.1 Adopter categories

As aforementioned, there are echelons of adopters that form the social sys-

tem; they form groups according to how first they get the information and their

degree of responsiveness. There are peculiar features of each group that

make them to act in a certain different patterns. Rogers (1983, 248-250) pos-

tulates the five-adopter categories and characteristics:

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Innovators: They tend to be Adventurous; however, they constitute relatively

small smaller part of the social system. Innovators play a very important role

in the social system. They always seek for anything new, and are very fast to

adopt new trends. Innovators are aware of innovation earlier the formal disclo-

sure to the rest of the social system. They are often ready to have the innova-

tion at high cost and pay costly to be among the first to have the offering.

Early adopter: Members of this echelon are opinion leaders. They are in-

tense to find out a new trend (innovation) and their usage. They then pass the

information to the rest below the social system. They are sine-qua-non to in-

fluencing the attitude and changing the behavior of the later adopters. The

rest of the later social system depend on their influence and opinion to take

decision.

Early majority: The early majority carefully observe the early adopters, but

wait to adopt innovative products or idea when they are convinced that they

will get value from their money. The people that belong to this group do not

adopt innovation on impulse. They adopt innovation based on prove of the re-

sult and testimony from the early adopters, they usually adopt innovation if

they are sure the new product will provide usefulness to them.

Late majority: This are also called skeptics, the late majority wait until a ma-

jority of consumers has accepted an innovation and the price has dropped be-

fore adopting the new product. The late majority typically adopt innovative

products because they feel that everyone else is doing it. They get influence

from bandwagon effect and risk little or nothing by adopting innovation.

Laggards: They are called traditionalists, laggards are the very last group to

adopt a new product. They usually do not adopt on instinct buying rather they

adopt when there is serious need for it. Laggards are contented with what

they have, and they adopt new products indifferently and only because it is a

necessity.

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Figure 1. Adopter categorization (Rogers 2006)

2.1.1 Innovation Diffusion Process

Researchers in the area of innovation diffusion claim that individual adopter

display some overt and covert behavior before accepting or repudiating inno-

vation. This implies that for an adoption to take place there is process that oc-

curs over time and consists of a series of actions. Figure.2 shows the exact

nature of these sequential stages in the process of innovation decision.

This action include:

1. Knowledge or awareness of the innovation's existence and gets some un-

derstanding of how it functions.

2. Persuasion that happens when an individual or group of individual develop

favorable or unfavorable attitude toward the innovation.

3. Decision which happens when an individual (or other decision-making unit)

engages in activities that lead to a choice to adopt or reject the innovation.

4. Implementation which happens when an individual (or other decision-mak-

ing unit) puts an innovation into use.

2.50%

13.50%

34%34%

16%

Innovation adopter categories

Innovators 2.5%

Early adopter 13.5%

Early majority 34%

Late majority 34%

Laggards 16%

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5. Confirmation: happens when an individual (or other decision-making unit)

seeks reinforcement of an innovation-decision already made, but he or she

may reverse this previous decision if exposed to conflicting messages about

the innovation.

Figure.2 Innovation diffusion process (Rogers 2006)

On the contrary, Gartner (2008, 10-11) had earlier criticized swift adoption of

innovation, as there are speculations that most innovation come with hype to

lure investors and other stakeholders. Gartner's (op.cit.14) Hype Cycles pro-

poses a model on relative maturity of innovation in a certain domain. Gartner

did not only provide a scorecard to separate exaggeration from reality, but

gave models that help potential adopters decide when they should adopt new

technology. Innovations face criticisms because it promise over-emphasized

claims and meet relatively a few of the claims at the onset, then disillusion

sets in and thereafter there will be a balance. Innovation diffusion scholars

postulate that the balance stage is the right time to adopt an innovation be-

cause the adopter will take informed decision not based on hype. Figure.3

Knowledge of innovation

Persuation about innovation Decision to adopt Implementation Confirmation

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shows Gartner´s model.

Figure.3 Gartner´s cycle model on innovation adoption (Gartner 2014).

2.2 Types of innovation

There are different types of innovation as postulated by Moore (op.cit.61-72).

According to Moore, these innovation types are first in a cluster of four zones,

and then sub-divided into precise innovation types.

The demonstration of the four main innovation zones are in Figure.4

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Figure.4 Four innovation Zones (Moore 2005).

The four zones of innovation are subdivided into specific innovation type

(a) Product Leadership area:

Disruptive Innovation: These comprises Products and ser-

vices which make change in technology termination. It disrupts

the mainstream technology and create room for new one. This

changes the initial standards and value chains are swapped in

favour of new approaches. Soft-SIM is an example.

Application Innovation: This is also referred to ´´solution inno-

vation`` by Moore (op.cit.64). This entails finding new benefits,

unexploited potential markets, and linking existing functionality

for an existing innovation.

Product Innovation: This requires refining on the functions and

benefits of existing products. These are attained by improving

the functionality and usability for existing markets.

Product leadership

Zone

Customer intimacy Zone

Category renewal

Zone

Operational excellence

Zone

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Platform Innovation: pioneers of Platform innovation form initial inno-

vation foundation on which third parties can build further value. Suc-

cess here relies on architectural control, relationship building, and gen-

erating benefits for the entire ecosystem. Famous examples are Intel

and Microsoft.

(b). Customer Intimacy

Line Extension Innovation: In Line-extensions innovation, new and

innovative branches emerge in current groups. There are some kind of

fundamental adjustment to achieve this objective, for instance, modifi-

cations of packaging to make new products and services.

Enhancement Innovation: In this type of innovation, specific reforms

on the structures of product are made.

Marketing Innovation: Marketing innovation uses new or effective

tools of marketing to outpace competitors.

Experiential Innovation: This classification of innovation happens

most often in service area, or by augmenting the service to an existing

offering.

(c). Operational Excellence

Value Engineering Innovation: The intention here is to manage costs

judiciously in business for existing offering without compromising their

contents. Enhancing parts and the overall assemblage upgrade are the

goal here.

Integration Innovation: This is the opposite of value-engineering inno-

vation, the price of customer’s title decreases due to simplification.

Process Innovation: This is a type of innovation on the process of

making product or rendering service rather than offer itself.

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Value Migration Innovation: This type of innovation moves interest

from commoditized offerings to segments that are richer in profit and

growth opportunities.

(d). Category Renewal

Organic Innovation: This entails refocusing a business`s to a devel-

opmental group.

Acquisition Innovation: This approach is related to merger and acqui-

sitions by interested parties.

Harvest and Exit: This thoughtful decision to bring to an end the life

cycle of a business.

2.2.1 SIM EVOLUTION OVER THE YEARS

Previous reports on the metamorphosis of generations of Subscriber Identity

Module ´´SIM`` is an indication that SIM had undergone some significant re-

forms over the years. Many of these SIM undergo reformation with each tech-

nological replication or disruption yet, perform a multitude of functions with

sufficient processing capacity. They will also need to have built-in cellular con-

nection. The soft-SIM technology is one of these possibilities, in the form of

reprogrammable SIM downloaded in the smart device.

Subscriber Identity Module (SIM), the basis for this academic inquiry had ad-

vanced through so many stages, firstly, it was of the size of a credit card, then

it was Mini SIM card, and this SIM card was common among older phones

and first generations of smart machines. Mini SIM size is comparatively bigger

than what we have now (ubergizmo 2017). The succeeding generation of SIM

card is a relatively smaller in size, it is known as Micro SIM. This was as at

then, the standard size for smart appliances. Then the latest and the smallest

SIM Size so far is the Nano SIM. Also existing is the Embedded SIM.

Picture. 1 shows how the size of the SIM has reduced to the 4FF SIM (or “Nano

SIM”) that is widely used in new smartphones today (GSMA Intelligence 2015).

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Picture. 1 Different sizes of SIM cards (ubergizmo 2017).

Nano-SIM, which are relatively smaller than their predecessors, was introduced

in early 2012. Nano SIM is used as from middle 2016 smartphones such as

Honor 7 lite. Despite their small size, these cards can store as much data as

larger cards.

Table 2. SIM sizes (Ken`s Tech).

Variation 1FF 2FF (“Mini

SIM”)

3FF (“Micro

SIM”)

4FF (“Nano

SIM”)

Year 1991 1996 2003 2012

Size (mm) 85.6x 53.98 25.0 x 15.0 15.0 x 12.0 12.3 x 8.8

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2.2.2 SIM DEPLOYMENTS

In this section, we will first explain the term “Traditional SIM card approach”

“Embedded SIM” and “Remote provisioning”. Following these definitions, we

will look at the different device´s segments and the SIM solutions currently de-

ployed in each.

Traditional SIM card method

The traditional SIM card is piece of removable hardware that connects the sub-

scriber’s appliances to a network. This SIM card stocks the operator´s data.

This comprises operator profile, information that permits identification and au-

thentication of the SIM card with respect to a selected mobile networks.

Technically, the traditional SIM is built on the UICC technology of a card. The

UICC is a protective computing appliances that is used through many sectors

including mobile telecommunications. The UICC corresponds with the stipula-

tions of ETSI Smart Card Platform.

Embedded SIM

According to GSMA Intelligence publication (2015), embedded SIM is designed

to enhance machine to machine (M2M) communication. In this kind of situation,

the SIM is attached physically to the device. Practically due to the integration

of the SIM to the device; it cannot be removed from the device and replaced

with another SIM. This kind of situation can also occur when there is a contract

or subsidy within the SIM and the device producer.

Remote Provisioning

Remote Provisioning is the ability to effect some changes on the SIM profile on

a deployed SIM without necessarily changing the SIM itself. This technology

can be implemented on any SIM form factor, including removable and soldered

SIM. In order to achieve this, the SIM has additional memory and is therefore

is able of holding extra operator`s profile rather than only one on the traditional

SIM. GSMA intelligence report (op.cit), states that the update of remote provi-

sioning SIM approach can be via the air

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History of SIM card

SIM card history is traceable to the beginning of use of the GSM mobile network

communication (thewirelessbanana, 2013). SIM card was first developed in the

year 1991. The cards were created on joined circuits called subscriber identity

modules. These modules store information required for authentication to enable

the subscriber’s phone to link to a mobile operator´s network. Serial number as

well as network information identify each card, and users can remove or replace

the card from one phone and install it in a new one without registering the de-

vice.

According to wirelessbanana`s publication (2013), the first SIM cards were of

the size of a credit card, but condensed over time to less than postage stamp

size. SIM cards had advanced and developed increasingly better features and

storage capacities. Mediocre cards are able to store information such as con-

tacts, locations of subscriber, text messages, patches, and settings. They also

accommodate applications and permits users to access them from any phone.

The SIM card supports GSM facility in various countries. The SIM is a rela-

tively small, inexpensive memory chip with a security algorithm that provides a

protection mechanism against malicious manipulation. According to devel-

oper. Samsung, in tech-insight article titled ´´history-of-SIM¨, the SIM ensures

identification and authentication competently with the aid of EAL-5 (Evaluation

Assurance Level).

The SIM however, is not without a standard yardstick. The standardization falls

mainly under the helm of affairs of two international agencies; the International

Organization for Standardization (ISO) and International Electro-technical

Commission (IEC). The duo create the standards for smart cards together, and

serve as the base for most smart card standards., Correspondingly, European

Telecommunication Standards Institute (ETSI), has also created smart card

standards in the Technical Committee for Smart Card Platform (TC SCP) (Wolf-

gang &Wolfgang 2010).

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In 1991, Giesecke and Devrient supplied the first saleable SIM card to a Finish

Network operator. The SIM card was at first designed to work on the standard

GSM network as at then and was of the size of credit card (GSMA Intelligence

2015). According to (Giesecke & Devrient), the key role of the SIM card was to

achieve two things; Identification and Authentication, both of these benefits are

still relevant till today:

1. Identity: The SIM card contains a unique location number that identifies the

SIM card as well as the accompanying subscription. The operator`s network

can recognize the location number and ensure that associated cost incurred go

to the users correctly.

2. Authentication: In order to ensure validity of the identity, the mobile opera-

tors use a security apparatus to give access to the network. These authentica-

tion processes gets verification by ordering some safety information from the

SIM by the network operators, and once this information is guaranteed, ac-

cess to the network is established. Additionally, if the SIM card damages or

the security is compromised, new SIM card is replaced. Therefore, the se-

cured connectivity is restored without substituting the entire handset.

Similarly, if a consumer wishes to migrate to different network provider, they

can do so through swapping the relatively low-cost SIM card rather than the

entire handset. That is, if there is no agreement between appliances and mobile

operators. Otherwise, the subscriber can port to alternative mobile operator

whereas using the old mobile operator platform.

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Figure.5. SIM authentication architecture (Penz 2004).

The SIM card also brings secondary benefits for the end users:

Authorization: Authentication differs from authorization, authentication is Sine

qua non of authorization, the authenticity of a user must be confirmed before

he or she is authorized to link to the network, especially for clients in an un-

trusted location. It allows verification of the identity of the parties devoid of dis-

playing public secrets (Wolfgang&Wolfgang op.cit.26). Authorization is the pro-

cess of deciding if a certain subscriber is eligible to have access to a particular

service or not, to access a resource or make use of service. When services are

requested for essential approval, it is protected from intruder. Authorization to-

kens are secured when making service request and are not easily faked, and

are prevented from response attack.

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Portability: This refers to the relocation of stored identity on the SIM card, The

SIM identity can easily be moved to a new device when the consumer upgrades

or replaces their handset.

2.3 Soft-SIM: a disruption of SIM card

Disruption in technology is attributed to technological improvement (National

Research Council 2010, 11). Similarly, Latzer (2009, 604) likened disruptive

innovations with radical innovations. According to National Research Council

(op.cit.11), disruption occurs to either modify the existing configuration of

technology or to end the previous technology. This implies that disruptive in-

novation involves the discontinuation of existing mainstream trend for another

new trend. Nevertheless, Clayton et al (2004, 132) suggest that creating a

niche is part of disruptive innovation. Clayton et al (op.cit.132-133) pointed out

the case of CRJ-200 (Canadian regional jet) versus the then dominant airlines

Boeing and Airbus as an illustration for innovation in niche.

Discontinuation

Performance

New

Old

Effort and Funding

Figure 6. Disruptive innovation curve (Gans 2016).

Nowadays, smart devices adoption and connection are advancing rapidly, this

will eventually shape the future and the ecosystem of Telecommunication In-

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dustry. Proactive measures should be followed by Innovative Telecommunica-

tion firms in order to remain relevant. According to EY ´´Risk in Telecommuni-

cation`` (2014, 11) Telecommunication industry must ensure to maximize the

opportunities of new dimension in evolving industry ecosystems and they

must adapt to new roles across a growing number of industry value chains.

Soft-SIM, equally referred to as software SIM is a complete soft app and data

that has all the features and functionality of a SIM card but does not have en-

closure in a secure data storage. Rather it is stored in the memory and proces-

sor of the mobile device. It usually does not have SIM hardware layer. The soft-

SIM is anticipated to be out to the next generation of smartphone (whatphone).

Samsung and Apple have been playing with idea of soft-SIM. Attempt was

made by Samsung to experiment this innovation in the Samsung Gear S2 wrist-

watch and is anticipated that this trend would be let out in generation of smart

appliances. Soft-SIM is to be downloaded and installed via the app stores like

apple store etc. Below is an example of a platform to download sof-SIM.

Figure. 7 Play store for SIM download (web page 2016).

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According to the article titled ‘’the future of Australian mobile phone SIM cards”

by Whatphone Australia, the soft-SIM will substitute the existing physical SIM

card. That means that soft-SIM shall disrupt the existing SIM card, and that soft-

SIM can aid smart devices to connect to mobile operator´s network for mobile

data and mobile reception connectivity. Whaphone postulates the speculation

of this technology many years but it has taken until now to become a fully func-

tional part of currently manufactured devices. Also, Apple announced this func-

tionality for the first time, it is to be in their newest iPad. Similarly, Samsung

presented this in their Samsung Gear S2 watch, this trend is yet to be widely

accepted as a standard on all smartphones. With Apple introducing the soft-

SIM, there is tendency that they are observing the market and consumers at

the same time, to ascertain response to this new feature, as well as keeping an

eye on the carriers which are supported by the SIM.

According to Elaheh (op.cit.56), the idea of proposing the soft-SIM is to

change the current SIM by a strong component connected on the mobile

phone. This equally called Secure Element and software SIM downloadable

via play store. Also Elaheh (op.cit.56), further asserts that there are different

interpretations of the concept of software SIM). The ideology of soft-SIM tech-

nology has not gained mainstream acceptance due to general worry regarding

the security of the Software. Also, poor Mobile Network Operator support of

Soft-SIM. Elaheh (op.cit.56-57) claims that for the soft-SIM environment, the

hardware platform is accountable for safety of the SIM activities. Elaheh main-

tained that to authorize means an imposition of instructions via software and

components of hardware in a completely safe situation. The implication is that

protection is realized from synergy of hardware components and their imple-

mentation.

2.3.1 How soft-SIM works?

The soft-SIM is a technological functionality, which has was test-marketed in

the most recent iPad tablet, Samsung Gear S2 watch and anticipated to be in

upcoming smart mobile appliances. A soft-SIM is a built in feature that will re-

place the traditional physical SIM card and will authorize users to connect to

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mobile operator of choice, by selecting the carrier that they wish to use and

entering in their details.

No longer will subscribers need to replace the current physical SIM card in their

appliances nor port to their next service provider. Swapping service providers

will be automatic and immediate, all done from within the device with only a few

taps of your finger. For instance, a subscriber can switch from Saunalahti to

Sonera or even to MTN in Nigeria within seconds by simply signing out the not

needed SIM and signing in the preferred SIM.

This will allow consumers to have an even more level of flexibility and options

when it comes to selecting which SIM. However, it is most suitable for prepaid

plan. Soft-SIM share some similarities with Apple’s MVNO and SIM card, since

it also presents users with all available operator profiles. However, unlike Ap-

ple’s technology, soft-SIM enables dynamic via air provisioning once a network

is selected. Today, the sector may react much more favorably. In addition, ma-

chine-to-machine (M2M) applications have used this architecture for in-built

SIM cards for several years now with great success.

The previous SIM disruption portends the possibility of soft-SIM, for instance,

because of the progress in the number of M2M and the growth of consumer e-

SIM specifications by the GSMA, the distribution of e-SIMs was quoted to out-

grow that of traditional SIM cards over the next several years by a large margin.

Meukel (ét.al.2016). This means that disruption will continue to happen in the

life cycle of SIM.

2.3.2 Soft-SIM Access and Connectivity

In time to come, soft-SIM yardstick will likely entail a new or non-provisioned

appliances to link to an online service (for example, a soft-SIM profile discovery

server) to download an operator profile to the smart device. Certainly, details

about the soft-SIM operating model including the needed components for a pro-

visioning architecture will get approval from OEMs, network operators, SIM ven-

dors, and the GSMA.

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Although architecture components remain the same as the existing environ-

ment, however, the industry group needs to agree on a solution for how the

online discovery service will create the initial linking between the handset and

the profile-generating units. Independent ownership is preferred from a con-

sumer perspective to ensure that all available mobile operator profiles are

available for selection without the need to state a preference for a specific

provider. The modification of SIM connectivity will absolutely alter the existing

SIM ecosystem, for instance, enabling through the air provisioning of operator

profiles requires a standardized architecture with agreed-upon interfaces and

procedures across all ecosystem participants.

The use of soft-SIM platform implies that the competent app developers will

negotiate with hardware smart appliances manufacturers directly, and the in-

dustry value chain may face reconfiguration. The manufacturing and distribu-

tion of physical SIM cards becomes obsolete, although reconfiguration and

profile management service area already form a significant part of the value

created for old-style SIM card vendors. Physical SIM cards are not expected

to disappear from the market within the next few years. Rather, a relatively

long phase of side-by-side existence between SIM technology and the new

standard is expected.

Profile generation unit: soft-SIM profile generation will take place via the same

processes used for SIM profile development. SIM vendors will use authentica-

tion details provided by network operators to generate unique network link keys.

Rather than storing these details on physical SIM chips, they will be in digital

form only and will await a request for download triggered by the embedded

universal integrated circuit card (e-UICC) in the consumer’s handset.

Profile delivery unit: The profile delivery unit establishes the connection be-

tween the e-UICC in the appliances and the profile generation service. This is

responsible for encrypting the produced profile before it gets transmission into

the device. While theoretically, all participants in the new soft-SIM ecosystem

could operate the profile delivery service, those most likely to do so will be either

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the SIM vendors or the mobile network operators (MNOs) physical and virtual—

themselves.

2.4 Merits of soft-SIM

The SIM card in its current physical form leaves all of the control of consumer’s

choice in the hands of the mobile operators and allows them to dictate the fate

of consumers subscribing to their service. Nevertheless, with the soft-SIM,

there is high flexibility in switching from among different mobile operators. Ear-

lier report (whatphone), claims that with soft-SIM in recent years in Australia,

consumers have been lucky to receive varieties, this was facilitated by MVNOs

entering into the telecommunication industry, allowing them to switch providers

if they find a better deal.

Again, with soft-SIM, telecommunication industry ensures to put cost under

control. Additionally, to support and benefit from the emerging new technology

markets, relevant organizations such as GSMA and 3GPP recognize and had

started several initiatives to address the issue. In the new business models and

usage situations (e.g., downloadable SIM application), the user easily can have

access to several networks but by installing soft-SIM, the user is connected to

the specific network and to change network he or she has to insert another card

in device. On the other hand, soft-SIM is of great benefit to the subscriber as it

allows flexibility for the consumers. It gives device owners the ability to compare

networks and select service at will directly from the device. (Meukel et.al.2016).

Since there is accompanying cost for issuing hard SIM, the mobile operators

would save money by providing Soft-SIM. The discontinuation of the current

SIM card would save some significant cost for the mobile operators, this is be-

cause while current SIM cards still may be suitable for complex devices, there

are yet some costs additional to a SIM card, cost that accrue from the produc-

tion of SIM cards, hence, this may be preventable with use of soft-SIM.

The soft-SIM phenomenon is a win-win situation for the subscribers and the

operators. It is not just consumers who stand to benefit but also mobile net-

works who stand the chances of reaching remote geographies. The consumers

30(60)

would not have to worry about misplacing data and would never have to go to

the vendor outlets to purchase a new SIM.

In addition, IoT supported product manufacturers (for example, connected car

or wearable manufacturers) would have the capacity to form devices with

“blank” SIM that could be activated in the destination country. This functionality

would make for easy connection and permit manufacturers to offer new prod-

ucts in new market segments. Again, appliances manufacturers may be able to

take control of the relationship with the customer because soft-SIM, at least

technically, discourages intrusions of mobile operators from the end-to-end re-

lationship. Soft-SIM also frees up space in the devices which gives manufac-

turers an opportunity to develop even extra features using the space once oc-

cupied by traditional SIM cards.

The purpose for the soft-SIM, as postulated by Elaheh (op.cit.57) is achieved

when a chip has the capacity of downloading of the SIM applications in terminal.

The Secure Element is not an UICC but also use instead of UICC and it is a

dynamic location to store information and to download applications via a secure

manner. The Secure Element is a smartcard module like a secure SD memory

card bonded to the motherboard of terminal that could be part of microproces-

sor chip to install SIM application.

2.4.1 Challenges of Soft-SIM

While soft-SIM promises numerous benefits, there are yet some disad-

vantages attributed to soft-SIM. The soft-SIM platform could be more flexible

and convenient for the users but it could be challenging to ensure the same

level of security. According to Whatphone plans article on soft-SIM in Aus-

tralia, it is anticipated that soft-SIM will fully make the consumers take over

supremacy and power over their service providers. Additionally, there is com-

plication of establishing the authorization of subscriber as the write and read

entrance to the embedded SIM is trusted by genuine admission to strictly per-

mitted subscribers. However, the challenge here becomes who can be de-

fined as authorized personnel? Hence, during SIM downloading, the concern

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is duplication and copying that may occur, yet, another challenge is to prevent

copying of the SIM and it’s misused.

Still to come, soft-SIM as indicated in related literature appears to be flexible,

moreover, convenient for the subscribers but it could be challenging to ensure

the same level of security. Prior literature asserts that soft-SIM otherwise

known as software SIM had not really gained popularity over the years be-

cause of security fears. Elaheh (op.cit.56) suggests that bearing in mind the

nonchalant attitude of Mobile Network Operators towards Soft-SIM, there is

no extensive worry on their development and technologies. The mobile opera-

tors may continue to shy away from adopting the innovation due to the fact

that mobile network operators are not sure about the associated safety proce-

dures and intricacies of soft-SIM.

In addition, Elaheh (op.cit.61), have argued the success of soft-SIM specifically

because of loss of identity of the mobile operators. The question is as to

whether the new disruption of SIM will be accepted by the mobile operators.

Also at the moment, the mobile network operators enjoy the benefits that ema-

nates from the contents and contexts of their offering, such as the billing of

subscribers on the SIM card, whereas the expected new technology might not

guarantee operator`s full control on the access and billing on the SIM, there

may be less avenue for the mobile operators to make charges for their offerings.

The existence of the physical Subscriber identity module may be more or less

inconsequential.

Mobile operators are worried over the security of their credentials and the inter-

ference in security that may come up because of use of soft-SIM. This is be-

cause the soft SIM operating system is relatively vulnerable to hacking than

hardware. This could expose the operator profile to the risk of hacking activity.

Any SIM platform that is not founded on the safety of hardware and software

security stands a risk of frequent attack by the hacking community. Minor secu-

rity interference may cause a serious loss of customer confidence in the secu-

rity of operator systems. There is security synergy when there are two elements

providing security, hardware and software, both providing protection.

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2.4.2 Soft-SIM new value chain system

The entire customer package and in store experience may also be altered. For

example, soft-SIM disrupts subscriber`s need to go to a store and acquire a

SIM card when establishing a business relationship with service provider. Con-

sidering that the over the counter interactions are ample avenue to influence

customer decisions, operators will need to assess the potential impact of losing

this customer touch point and consider new ways to attract customers to their

sales outlets.

Logistics There will be need for reformation of many services; the customer-

service and logistics will be widely affected. For example, safe communication

procedures for profile PIN delivery will be required.

Churn and loyalty

The customer may be able to easily migrate from among the mobile operators,

and slightest short term promotions may trigger swap of the mobile operators.

This means that churn between operators in a strong prepaid ecosystem will

likely increase and may result to unhealthy rivalry. Nevertheless, this does not

necessarily mean that a customer who is not locked into a contract will churn

networks more frequently or spend less. Consumers may still select a deal that

offers a superior user experience and satisfactory call quality. Satisfied users

will likely be loyal to the operator as long as they are locked-in customers.

On the other hand, Soft-SIM’s impact may be greater in markets with more pre-

paid customers than in markets with a high share of subsidized devices. While

appliances subsidy levels will remain an important driver of customer loyalty in

developed markets, investment in device subsidization expectedly may fall dra-

matically in future, approximately 20 percent of all appliances sold to less than

8 percent in 2020 (Meukel,2016).

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Figure. 8 Declined of sales of subsidized devices by 2013-2020 (Meukel

2016).

Of recent, with the idea of soft-SIM, many business models have evolved

around soft-SIM. For instance, Meukel (op.cit.2016) argued that Wholesalers

dealing on numerous mobile operators within the ecosystem could offer plan

selection without disclosing which network is providing the connectivity. The

customer might then be auctioned unexpectedly among network operators for

a period. Electronic profiles could even be switched among mobile operators

blamelessly for the client.

In addition, there is an assumption of interference of Social media and Internet-

content package with the soft-SIM innovation. With the emergence of VoIP that

provide alternative mobile telephone call services, the traditional mobile opera-

tor plan schemes may experience impending disruption on the profitable as-

pect. Aside offering competitive rates, new players may further increase margin

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competition by offering some after-sales incentives such as refunds of unused,

prepaid minutes in their pricing models.

There is speculations that GSMA is working with global network operators to

develop a standardized reference architecture for the implementation of soft-

SIM technology. The forthcoming trend may lead to extensive industry adop-

tion of soft-SIMs in the near future. This trend may result to disruption in the

external and internal business environment. Concerning these, new entrants,

new sales and service models will determine soft-SIM’s effect on the mobile-

telecommunications market in future. Revenue is at stake, and operators’ ap-

proaches to developing plans, shared data plan portfolios, potential new reve-

nue streams, and handset support strategies across many markets will play a

big role in how they fare in the new soft-SIM ecosystem. Whether an operator

decides to take a role as an early adopter or an early majority, an overall strat-

egy and associated initiatives need to be shaped thoughtfully now.

2.5. Soft-SIM security

Considering that the idea of Soft-SIM depends not just on a physical SIM card

but on a software platform, it is important to ensure the safety of the medium

or platform through which they are downloaded. Malware and other threats

may pose serious security problem on the profile of the subscribers.

Wireless Network Authentication

The objective of this idea as quoted to have been invented by Schell.S

(Elaheh op.cit.69) and proposed by Apple, is to enable devices of subscribers

to have legality services. This technological trend has been claimed to be one

of the answers to Soft-SIM authentication. Soft-SIM security management

therefore, require that the mobile operators enhances enabling environment to

access the services efficiently.

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3 RESEARCH DESIGN AND LAYOUT

Typically, every research work follow a set of stages, from the theory develop-

ment/hypothesis testing till final conclusion. This is known as research design.

Yin (op.cit.26) views research design as the consistent order that connects

the realistic data to a study´s initial research questions and, certainly to the

findings. In a similar note, Bryman & Bell (2007, 40) define research design as

a structure for collecting and analyzing data.

Often times, novice researchers tend to interchange the concepts of research

methods and research design to mean exactly the same thing. Whereas,

there is division between them. While the research method(s) is/are tech-

nique(s) for gathering data for example the qualitative or quantitative meth-

ods. The research design indicates the level of priority of the research pro-

cess or stages according to the researcher´s preference. The five compo-

nents of research design as highlighted by Yin (op.cit.27) include:

I. The questions of the study; for this research, the question is

how the telecommunication industry can adopt the soft-SIM?

This is in consideration of the evolution of SIM card over the

years.

II. The proposition of the research; this refers to the assumption

of the thesis, however, this research is more of exploratory re-

search and dwell more on theory development.

III. The thesis unit of analysis; this thesis attempts to ascertain

how soft-SIM can be used in the telecommunication industry as

well as why the disruption is worth it. The development of SIM

as well as the benefits and challenges are discussed in chapter

two. The studies did not cover everything about innovation as a

topic, it dwelled on disruptive innovation and emphasis is on

soft-SIM as a disruptive innovation over existing SIM card such

factors like the research focus, scope are discussed.

IV. The logic linking data to proposition; this is the data analysis

steps.

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V. The criteria for interpreting study´s findings; in some re-

searches, this entails statistical analysis, but such approach is

not the best for case study. There are other important ap-

proaches that can be used in a case study. For instance, com-

paring and clarifying important opposing findings as against the

positive findings. This is discussed in details in chapter five.

Bryman & Bell (op.cit.40) highlighted five different research designs:

I. Comparative Design.

II. Longitudinal Design.

III. Cross-sectional/Social survey design.

IV. Quasi-experiments Design. And

V. Case study Design.

The research focused on an explorative ´´Case Study research approach``.

The reason for the choice of case study is to better give an in-depth clarifica-

tion of the evolution of SIM and the future trends as well as the limitations of

soft-SIM environment. These serves as a guiding steps to answering the re-

search question ´´´How Telecommunication industry can adopt the soft-SIM``.

In addition, Piekkari and Welch (2004, 111) propose that case studies ap-

proach are preferred when the researcher has minor control over events and

when the focus is on a present day phenomenon in a real life context. This

approach has the capability to deepen the researcher´s understanding of SIM

evolution so far and the likely future changes in the ecosystem, this is so be-

cause it gives room for a longitudinal approach.

However, Yin (op.cit.19) affirms that case study is not limited to qualitative re-

search method alone, the scholar argues that case study could be used in

both quantitative research method and mix of both quantitative and qualitative

methods. Furthermore, Piekkari & Welch (2004, 111) are of the view that case

study approach suites international business research, where data is gathered

from diverse cross-border and cross-cultural location.

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This thesis intends to get a strong understanding of the future of SIM, compar-

ing the evolution over the years. Especially considering the researcher`s lim-

ited knowledge about the research problem.

Case study is a thorough examination of a particular case, either single or

multiple case study. It is practical study that examines in details, a real life

phenomenon especially when the limits between phenomenon and context

are not obviously defined (Yin, op.cit.18). Also, Simons (2009, 19) defined a

case study as the study of a particularity and density of a single case, ensur-

ing to understand its activity surrounding relevant occurrence. Bryman and

Bell (op.cit.62) postulate that a research is said to be a case study when it

provides a thorough and wide examination of a particular case. According to

Bryman & Bell (op.cit.62), some of the widely acknowledged studies in busi-

ness and management research are based on case study research.

Although case study format is quite cumbersome to undertake as opposed to

some views. First, there are hitches that usually arise from making arrange-

ment of meeting the resource persons for interview or discussion, this is be-

cause most times, they are either too busy to give you attention or in some

cases are not just interested in granting interview at all. Personally, this hin-

drance is rather challenging to the researcher. Aside these, Case study de-

sign entails that the researcher develops a clear research question, in-depth

understanding of the previous literature, well thought-out research design and

exhibits good language skill.

Piekkari and Welch (op.cit.107) propose that a case study research need rich

research questions, broad understanding of past works, good research design

alongside theoretical bedrocks and most importantly outstanding language

skills. Yin (op.cit.19) identifies the basic forms of case study research as sin-

gle case study and multiple case study.

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Figure. 9. Basic types of designs for case studies(Yin 2009).

Bryman and Bell (op.cit.64) are of the view that Case could be in different

types depending on the context of the specific case:

I. The critical case.

II. The unique case.

III. The revelatory case.

IV. The representative case.

V. The longitudinal case.

Bryman and Bell (op.cit.63) Claim that a case study is a thing of concern to

the researcher and the interest is to get exhaustive clarification on a case.

Furthermore, promoters of case study research have argued that the objective

is to develop a comprehensive analysis of a specific case, in relation to which

Single case designs

content

case

Embedded multiple-units of analysis

holistic single-units of analysis

Embedded units of analysis

Multiple case-

designs

content

case

content

case

content

case

content

caseEmbedded units

of analysis

Embedded units of analysis

Embedded units of analysis

39(60)

they then engage in a theoretical examination. Additionally, Bryman and Bell

(op.cit.64) argued that case study research design is not limited to the study

of a single case, pointing out that multiple-case study design is becoming pop-

ular in business and management research. However, this is not without a de-

merit, as the primary data are reconciled with the theory to arrive at a conclu-

sion. The paramount issue is quality of the theoretical thoughts that the case

researcher uses. Such issues like; how well do the data back-up the theoreti-

cal points that are produced? , is the theoretical analysis incisive? For in-

stance; is there similarities among the conceptual ideas produced from the

data? The concern here is not whether or not the findings of case study re-

search can be universal but how well the researcher creates quality theory

from the findings. (Bryman & Bell op.cit.64).

Likewise, Yin (op.cit.185-190) outlines what makes a case study exemplary.

Among the features of a good case study according to Yin are that:

I. Case study must be significant, a situation where the investigator has

limited resources, then the tendency is that the outcome might not be

weighty enough and will be less relevant.

II. A case must be complete. This implies that a case cannot completed

simply because the investigator ran out time or because the resources

were exhausted, the procedures of a case must be richly completed.

III. An exemplary case should be able to compare alternative views of re-

lated topics. In order to balance the diverse perspectives, an investiga-

tor should be able to consider the alternatives that most seriously chal-

lenge the assumption.

IV. Exemplary case study must display enough evidence, the investigator

should be able to manage the evidences in an unbiased manner, so

that a reader can reach independent judgment of the benefit of analyz-

ing the case.

V. A good case study must be structured in an engaging manner. The in-

vestigator should be able to structure the work in a way that draws the

attention of the reader. To achieve this requires that an investigator be

enthusiastic in putting up and communicating the case study.

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The entire academic exercise attempts to address the research problem

´´How soft-SIM can be adopted in the Telecommunication industry``

Data were gathered by using unstructured and semi-structured interviews.

These questions differ from one interviewee to another, and the order in which

questions were asked vary also, this is because some answers may lead to

another question instantly. Semi-structured interviews are primarily used in

explanatory and case study researches to gain deep understanding of a real-

life phenomenon.

Additionally, semi-structured interviews are used in exploratory studies to offer

further information about the research area. Unstructured interviews, also

known as in-depth or non-directive interviews, are designed to explore in

depth, a general area of research interest. Interviewees talked freely about

the issue on their behavior and opinions in relation to the research area. Such

interviews are used in research to find out more about a particular issues and

seek new insights. More than one type of interview was adopted in the re-

search design,

3.1 Structure.

This studies adopted similar to Seinäjoki University of Applied Sciences writ-

ing structure, starting from the title page to the abstracts, then down to the last

part of the process which is the Conclusion/Discussion. Below are the outlines

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of this steps.

Figure.10 Thesis structure (Seinäjoki University of Applied Sciences 2013).

Title page

Abstracts

Table of contents

Lists of terminology and abreviation

Figures, table and formulae

Introduction

Background

Layout

Methods

Results

Conclusion

Discussion

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3.1.1 Methodology

This chapter explains how the research was carried out. The methodological

style deployed to elucidate the research problems were discussed and given

justification. There are several methodological approaches adopted in scien-

tific research, among which include Quantitative, Qualitative (Bryman & Bell

op.cit.28-29) and mixed methods approach (Cohen et al.2011, 22-23), which

is a combination of both quantitative and quantitative strategies. The choice of

which one(s) to use is perhaps not to bamboozle or impress the supervisor.

Piekkari and Welch (op.cit.509) argue that the choice of the research

method(s) to be applied is dependent on the ontological, epistemological and

methodological ethics of a given research to be used. This correspondently,

must justify and underpin successive examination and explanation of data.

The duo further claim that not only will there be a uniformity in the research

problem, research design, methods of observation, measurement and analy-

sis but they should also be congruent with the ontological and epistemological

view of the researcher. Consequent to aforementioned submissions, it can be

argued that there are some factors that affect business research. The figure

15 summarizes these factors.

Theory Practical consideration Epistemology

Ontology

Values

Figure. 11 Influence on Business research (Bryman & Bell 2007).

Business

Research

43(60)

There are significant difference among qualitative, quantitative and mixed re-

search methods, each represents unique research strategy and has remarka-

ble uniqueness. For instance, Bryman and Bell (op.cit.28) quoted past writers

to have suggested that the difference between quantitative and qualitative

strategies go beyond assertion that quantitative deals with numbers and the

later deals with words. Rather they vary with the epistemological root. The ta-

ble below outlines some of the ways in which qualitative and quantitative re-

search do vary:

Table.3 Variance between Quantitative and qualitative methods (NIHR RDS

2009).

Qualitative methods Quantitative methods

Focuses on people, different perceptions

of reality

Uses general laws to describe and exam-

ine reality

Describes complexity by using realistic

phenomenon

Describes complexity through summa-

rized definition of the subject matter

Observes behavior in a natural environ-

ment, uses people`s information as data

and does not manipulate the data

Manipulates independent variables and

control extraneous and nuisance variable

Concerns information on personal experi-

ence or unquantifiable data

Uses statistical tools to quantify data in

such a way that can be accepted or re-

futed

Describes or interprets data in a way that

could lead to new theory formulation

Relates to cause and effect and uses ex-

periment premise for acceptance or dis-

approval

High flexibility and systematic research

process

Entails earlier definition of the research

process

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Qualitative research relates to developing explanations of social phenomena.

That is to say, it aims to help us to understand the social world and why a

phenomenon is the way it is. According to Hancock et al (2009, 7) qualitative

research is related to the social aspects of our world and seeks to answer

questions about: ·

I. Why people behave the way they do ·

II. How opinions and attitudes are formed.

III. How people are affected by the events that go on around them ·

IV. How and why cultures and practices have developed in the way they

have.

The researcher´s choice to use qualitative research is due to a number of

credits to this research approach, though critics have resisted the idea of

qualitative research approach because of a number of reasons, for instance,

according to Bryman and Bell (op.cit.404), researchers that undertake partici-

pant observation frequently adopt qualitative interviews, however, as they col-

lect, analyse text and document, there is considerable inconsistency in a col-

lection of data among core qualitative studies. Additionally, Critics argue that

the link between theory and research is somewhat more unclear than in quan-

titative research. Also, Piekkari and Welch (op.cit.7) suggest that qualitative

research is criticized of not considered as a legitimate science.

Similarly, Piekkari and Welch (op.cit.513) argue that their contemporaries of

the positivist view, are apprehensive that qualitative researchers adopt rela-

tively smaller samples, sometimes with a sample, however, the duo debunked

this claim by quoting that some of the best studies in management and inter-

national business were done on very small samples. Subsequently, qualitative

research is more than just measurement of noticeable behavior (the ´´What``)

it seeks to clarifies the meaning and beliefs underlying actions (the ´´Why``

and ´´How``), It gives answer to confusing problems and ambiguous issues

that are typical for international management research. And very imperative is

that the use of semi- structured interview allows the researcher to deepen the

interview and gain better elucidation.

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Figure.16 outlines sequence of steps that demonstrate the qualitative re-

search process:

Figure.12 Qualitative research process (Bryman 2007).

This research adopts a qualitative research method due to the nature of case

study, the researcher possesses mediocre knowledge of the research prob-

lem and needed in-depth exploration of the case from the telecommunication

stakeholders and professionals in the sector, therefore data and findings were

collected through interviews with top staff of two of the foremost telecommuni-

cation firm in Nigeria, Etisalat telecommunication and Airtel telecommunica-

tion respectively. In addition similar interview was granted by a profes-

sional/consultant in telecommunication sector in Finland. The diverse cultural

interviews of this research is intended to produce a rational cultural report.

Piekkari and Welch (op.cit.8) claim that qualitative research allows for deeper

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cross-cultural understanding and is less likely to be culturally bias.Also in-

cluded are online sources, printed materials from academic and business Li-

braries.

3.2 Collecting the empirical data

In this section, the method of collecting data is discussed and justified. Bear-

ing in mind that the researcher adopted qualitative approach to this research,

there are various methods of data collection in qualitative approach, this of

course is dependent on the research methodologies and design used by the

researcher. Different authors suggest numerous data gathering platforms

among which is interview, in a similar way, interview method was used in the

study research, however, the researcher will outline a handful of them and

discuss extensively on interview as a method of gathering data.

Below are some of the methods of qualitative research data collection as out-

lined by Hancock (op.cit.16):

I. Interviews.

II. Focus groups.

III. Observation.

IV. Collection of documented material such as letters, diaries, photographs.

Collection of narrative.

Interview

The term ´interview` is used in a number of ways, depending on the context it

is used. Interview is not an ordinary everyday discussion neither. Journalists

use this terms quite often but not exactly as in the perspective of scientific re-

search approach. Education research methods scholars, Cohen et al

(op.cit.409) suggest that interview is a flexible tool for data gathering, allowing

multi-sensory channel to be used. Piekkari and Welch (op.cit.186-187)

acknowledged some reasons that warrant the use of interview in international

business research. Firstly, they claim that interview-based research studies is

best suitable for exploratory and theory building studies, adding that the re-

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searcher studies the issues with little or no pre-existing theoretic bias. Sec-

ondly, Interview-based research may be used to maximize research studies

when there is a small population of available respondents/interviewees. This

means that the researcher must explore in-depth data collection when the

breadth is not attainable. This does not imply that the researcher unneces-

sarily deepen the interview to overcome the small population, rather, the re-

searcher sees interview as an avenue to gain the quality of information from

the interviewees. Thirdly, Interview may permit researchers to build under-

standing with the interviewee thereby giving room for honest and accurate in-

formation, this results to insightful foundation for follow-up studies.

The researcher approached the interviewees both in (Nigeria and in Finland)

without preconceived premise to adjust or validate theory, this is in order to

avoid prejudice and maintain objectivity in the theory development. This is also

owing to the fact that the researcher has limited knowledge of research context.

The researcher developed a semi- structure questions and interview guide to

ensure that the questions are within the context of the enquiry. Piekkari and

Welch (op.cit.192) suggest that an interview guide is a check list to assist re-

searcher in ensuring that all topic areas are covered in the course of the inter-

view.

3.2.1 Sampling

The researcher implemented ´purposive sampling`, bearing in mind that this is

a semi-structured interview, the choice of the interviewee is on the basis of their

likelihood to rich development of the subject. The researcher is interested in

persons in the field of the subject Matter and professionals than larger immate-

rial sample population.

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4 RESULTS

In this section, the data collated will be described, classified, categorized and

presented in a single sequential order, as proposed by Dey (2005, 54), see fig

17. The studies engaged four major opinions on the soft-SIM prospect, three

interviewees (primary data) and literature (secondary data). For the sake of

clarity, the researcher shall categorize the interviewees according to:

I. Interviewee one. (Nigeria).

II. Interviewee two. (Nigeria).

III. Interviewee three. (Finland) respectively.

Interviewee one asserts that soft-SIM would be a milestone achievement if im-

plemented in the telecommunication sector, however, she acknowledged

some challenges attributed to her firm`s typical social environment. Among

these challenges are; Illiteracy, preponderance of Laggards within their firm´s

social system. According informant one, high level of illiteracy would be one of

the major threats to soft-SIM success within their external environment,

greater percentage of their customers may find soft-SIM too sophisticated to

use. At the moment, most of such customers still see smartphone to be com-

plicated. Another threat according to informant one is that many of their cus-

tomers may take too long to key into soft-SIM ideology because it is new inno-

vation.

Interview two is of the view that the level of the soft-SIM awareness is poor

within Nigeria, so more awareness is needed for and by the stakeholders.

Interviewee three suggests that soft-SIM would make a landmark develop-

ment if adopted, and that telecommunication stakeholders have been deliber-

ating on this innovation over the years. He further noted that soft-SIM could

create new value chain system such as hospital diagnostic equipment that

could use soft-SIM to save information to cloud. However, he outlined reasons

why telecommunication key players shy away from endorsing this agitation

over the years. According to this interviewee, the telecommunication firms

have continued to repudiate this innovation for fear of losing ´´customer

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Lock-in``. This is basically because, at the moment, the customers are tied

to the mobile operators through the physical SIM card and this is one of the

major ways operator can charge for this service. The resistance of operators

is for fear of losing customer´s loyalty due to the flexibility of soft-SIM. He fur-

ther indicated ´churn` as another basic factor for the fear of adoption of this

innovation by the telecommunication firms. A “churn” in the telecommunica-

tion industry suggests the percentage of subscribers migrating from a specific

service to another in a given period of time.

Correspondingly, Whatphoneplan (op.cit), claim that soft-SIM when launched

will shift control from the mobile operators to the customers. Also, Meukel et al

(op.cit) maintained that churn through mobile operators is inevitable when

soft-SIM emerges. This is to say that informant one and three are in agree-

ment with the major opinions of the secondary data. The combination of likely

internal and external factors affecting the success of soft-SIM is presented be-

low in SWOT analysis.

Figure .13 Soft-SIM SWOT

SWOT

Strenght

Threat

Weakness

Opportunity

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Table 4. Soft-SIM SWOT analysis

Figure .14 Qualitative analysis as a single sequential process (Dey 2005).

data

describing

classifying

connecting

Account

Strength

-Global roaming services

-Subscribers have more power to make

choices

Weakness

-Sluggish adoption

-Might be complicated for some custom-

ers in less technological advanced area.

-Diminishes strength of mobile operators

- Government policy and regulation

Opportunity

-New value chain such as IP address sup-

ported hospital equipment

-Easy to activate

-Saves cost for subscribers

Flexible switching of operators

Threat

-Churn through mobile operators

-Unhealthy rivalry among operators

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Also, the success of technological innovation is not dependent on the innova-

tion alone. According to Dasgupta (2011, 270), technology innovation break-

through is determined by three major factors; technology strategy, technology

innovation and organizational environment. This implies that such factors like

business strategy and business environmental factors play huge role in the

success of technology innovation like soft-SIM. Figure 19 below summarizes

these factors.

Figure 15. Technological innovation framework (Dasgupta 2011).

Technology strategyOrganization factorsTechnological

innovation

Business

strategyGovernment

policy

performance

Businessoperational

Regulations

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In addition, it is imperative to examine the likely external factors that will make

or mar the success of soft-SIM. However, this study did not dabble into discuss-

ing the individual PESTEL factors in details, rather will point out the likely PES-

TEL factors that will determine the success of soft-SIM. Dasgupta (op.cit.269)

suggest that new technology encounters not just financial challenges but also

political, cultural challenges and more. Similarly, Team FME (2013, 6) publica-

tion, asserts that many of these factors cannot be controlled by firms involved,

the factors are known as PESTEL analysis.

4.1. Soft-SIM PESTEL analysis

PESTEL denotes; political, economic, social, technological, legal and environ-

mental factors that surrounds the survival of innovation. Once innovation is in-

ternationalized, the aforementioned factors raise questions that must be ad-

dressed efficiently. Such questions like;

What are the main political challenges?

What are the important economic factors?

What does the social life look like?

What is the technological level of the society?

What government policies and laws affect innovation?

What environmental threat does the innovation pose?

Political factors includes: such issues like stability of government, govern-

ment corruption, restriction of trade, employment rate, bureaucracy of govern-

ment.

Economic factors: under here are GDP and GNP, cost of living, tax, ex-

change rate, inflation and deflation, unemployment rate globalization.

Social factors: include Education, ethics, lifestyle, demography, cross-cul-

tural, Historical background.

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Technology factor: here are factors like Research and development, produc-

tion efficiency, Production efficiency, intellectual property.

Legal factors: Taxation, regulation, duties, import and export make up this

factors.

Environmental factor: In this factor are Environmental consequences, waste

management, and general hygiene.

Figure 16. PESTEL analysis (Free Management E-book 2013).

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4.1.1 Discussion

The inferences on the studies are drawn using the rival theory as postulated by

Yin (op.cit.39), also the earlier established literature is used as a yardstick to

match primary data (analytic generalization).

Level two

Level one

Figure. 17 Making inferences (Yin 2009).

The author encountered, numerous challenges in the cause of gattering

primary data (interviews). Most especially, securing appointments with the

informants. It is either the informant is too busy to grant interview or he/she is

simply not interested. For instance, all the efforts made to keep an

appointment with the product development manager in one of the foremost

theoryrilval

theory

policy implication

rival policy implication

SURVEY

population

characteristics

CASE STUDY

case study

findings

EXPERIMENT

experimental findings

sample subjects

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telecommunication firm in Finland proved abortive. Series of mails and text

messages were sent, yet no appointment or opportunity for interview worked

out. Also, some resource persons did not obviously comprehend the concept

discussed, the topic seems to be new and no useful information was gotten

from such informat. Basically, the primary data has limitations because of

insufficient resource person and the researcher hopes that successive

improvement will be made on this theory by other studies.

Again, the concept of soft-SIM is not popular yet, therefore, limited litrature

could be accessed on soft-SIM.

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5 CONCLUSION

The series of disruptions of SIM since early 90s, resulted to reformations

in sizes of SIM card. Also, the next generation of SIM is anticipated to

come in software form. This gives a positive impression and appears like

innovatory step towards better SIM formula, however the study finds that

the idea of soft-SIM has not been widely accepted by mobile operators be-

cause of the following factors.

I. Mobile operators see soft-SIM idea as a bad one, because of fear of

losing customer´s loyalty. Mobile operator´s Customer lock-in is under

threat by the idea of soft-SIM because of the flexibility of soft-SIM. Be-

sides the assertion;

´´The soft SIM when released on all next-generation

smartphones and tablet devices in the near future, will remove

all power from the telecom companies and place it all firmly in

the hands of Australian consumers``.

(Whatphoneplan Aus-

tralia).

II. Churn is a major bane of soft-SIM adoption. This is a situation where

the subscriber often switch mobile operator´s, depending on which is

presumed to provide better offer at the given moment. Though, this is

more pronounced where the prepaid plan is used.

Soft-SIM adoption in the telecommunication industry is dependent on the

unanimous approval by the Mobile Network Operators and widespread ac-

ceptance in the customer`s mainstream market. However, despite these

aforementioned hitches, some scholars insinuate possibility of adoption of

soft-SIM in the telecommunication industry in future. According to Gans

(2016, 18), new technological breakthrough initially takes so much time to im-

prove on the success, however, little effort at some point triggers success.

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Performance

Effort

Figure. 18 New technological success (Gans).

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